Cracker Barrel has officially called on shareholders to reject a call by the company's largest shareholder to put the restaurant company up for sale.
This week, Cracker Barrel Old Country Store Inc. began mailing out proxy statements to shareholders ahead of the company's special shareholders meeting scheduled for April 23 in Washington, D.C.
The meeting was called after Sardar Biglari, which owns nearly 20 percent of the company's stock, called for a sale of the company, preferably to himself.
However, a sale of that type is not allowed under Tennessee law. He also called on shareholders to push for the company to ask officials to amend state law to allow the sale to occur.
"We believe that Biglari's ... proposal, that the board take 'any action necessary to amend the Tennessee Business Corporation Act to permit Biglari Capital to engage in an extraordinary transaction with the Company,' is questionable and inappropriate," Cracker Barrel CEO Sandra Cochran wrote in a letter to shareholders.
She also said that Biglari's new push to buy Cracker Barrel (NASDAQ: CBRL) contradicts his statements dating back to 2011 saying he had no desire to purchase the company.
Separately, Biglari has made three separate attempts to gain seats on the board of directors, but was denied by shareholders each time.
Ultimately, Cochran said that shareholders should reject his proposal because the company's financial results show that's headed in the right direction.
"The board continues to believe that execution of the current operational and strategic plan outlined by the company over the past two fiscal years — which the Board believes has been primarily responsible for delivering the positive results to shareholders during those years — remains the best means for promoting the long-term interests of shareholders by maximizing value and future returns," Cochran said in the letter.